Jefferies: Amazon AWS revenue accelerated for the fifth consecutive quarter, raising the target price to $330.

Jefferies released a research report indicating that Amazon's performance in the second quarter was strong across the board, with AWS revenue growing by 37% year-over-year and an operating profit margin of 39.4%, just 10 basis points below the historical high reached in the first quarter of 2025. The overall operating profit margin reached a new high of 13.7%. Core retail sales increased by 15% year-over-year, marking the highest level since the pandemic. AWS backlog orders rose to $132 billion for the quarter, including approximately $100 billion from Anthropic. Management raised this year's cash capital expenditure guidance from $200 billion to $220 billion, above the market expectation of $215 billion. However, the firm believes that the demand is clear and sufficient to support this investment. The firm is optimistic about AWS revenue accelerating for the fifth consecutive quarter, with backlog orders also doubling since the third quarter of 2024, nearing $500 billion. This reflects a constrained supply in 2026, and they believe this situation will persist next year, with significant demand already emerging by 2028. The firm currently predicts Amazon's fiscal year 2026 revenue will grow by approximately 15.5% year-over-year, with an operating profit margin of about 13.1%, and has raised the target price from $320 to $330, maintaining a "Buy" rating.